HRM

1. UNIT-II (HR Policies & Strategies)
Introduction,
HR policies & Procedures,
HR Programme.,
Role of HR in strategic management,
Developing HR policies and strategies,
Strategic control,
Types of Strategic control,
Operational Control System,
Functional and grand strategies,
Strategy factors

2. HR Policies
• Policy is a predetermined decision to serve as a
guide towards certain accepted objectives.
• Calhoon- HR policies constitute guides to action.
They furnish the general standards or basis on which
decisions are reached. These genesis lies in the
organization’s values, philosophy concepts and
principles.
• HR policies are formed by top management. They
also lay down the criteria for personnel decisions
such as transfer, training, increment, promotion,
compensation, motivation, etc
• HR policies serve as a road map for managers.

3. HRM in a Changing Environment
•Advancement in Technology
•Cultural Forces
•Social forces
•Economic environment
•Globalization
•Political and legal environment(legislature, executive,
judiciary)
•Trade unions
•Leadership
•Organizational culture
•Professional bodies

4. ACCORDING TO DALE YODGER:
⦿ Personnel or labour or Industrial relation
policies provides guideline for the a wide
variety of employment relationship in the
organization.
⦿ These guidelines identify the organizations
intention in recruitment, Selection,
promotion.
⦿ Development, compensation, motivation
and leading and directing people in the
working organization.
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5. ACCORDING TO CALHOON
⦿ Personnel policies constitute guide to
actions they furnish the general standard
and bases.
⦿ on which decisions are reached their genesis
lies in the organization values, phylosophy,
concept and principles.
⦿ personnel policies are the plan of action.
It is a single use plan that describes the
activities to be carried out.
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6. ⦿ The time frame within which the task has to
be carried out.
⦿ The way the resources are to be utilized.
⦿ For eg. training programme will indicate the
no. Of trainees, the content of training, the
method to be used and the duration to which
the training is to be completed.
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7. CHARACTERISTICS OF PERSONNEL
POLICIES
⦿ Personnel policies are derived from the
personnel objectives of the organization.
⦿ Personnel policies are general statements
and guides thinking in decesion making.
⦿ Personnel policies are standing plans. they
are long lasting.
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8. CHARACTERISTICS CONT:
⦿ Responsibility of formulating the personnel
policies lies within the personnel
department and the top management.
⦿ The policies are made in consultation with
the line managers.
⦿ But the policies so formulated requires
approval of the top management.
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9. NEED AND IMPORTANCE OF
PERSONNEL POLICIES
⦿ Clear thinking.
⦿ Uniformity and consistency of administration
⦿ Continuity and stability
⦿ Sense of security
⦿ Delegation of authority
⦿ Orientation and training
⦿ Team work and loyalty
⦿ Control
⦿ Prompt decision making
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10. Objectives of HR Policies
• General employment policy
• Securing cooperation
• Ensuring employees obligations
• Providing competent and trained personnel
• Recognizing role of trade union
• Ensuring employee participation
• Innovative leadership with values
• Enforcing discipline
• Providing job security
• Providing opportunity for promotion
• Ensuring equality

11. Features of HR Policy
• General guidelines for deciding actions
• Focuses on what a manager should do?
• Expressed in general or conditional way
• It is a function of all managers
• Permanent feature of organization
• Guides future course of action

12. Advantages of HR Policy
• Facilitates decision making
• Facilitates actions
• Consistency of actions
• Continuity and stability
• Establishes better control and discipline
• Eliminates personal bias
• Creates confidence among employees
• Ensuring welfare of the employees.

13. Guidelines for Developing HR Policies
• Policy should contribute to objectives and plans
of the organization.
• Policy should be broad and flexible.
• Policy should be long range and fairly
consistent.
• Policy must consider informal groups.
• P should be prepared after a careful analyses.
• Policy should be distinguished from rules and
procedures.

14. Limitations in policy formulation
• It brings rigidity in operation
• It doesn’t leave room for initiative by
subordinates.
• Future unforeseen situations are not
covered
• It limits the human judgment and
decision making in certain circumstances

15. Steps in policy formation
• Defining need and initiating
• Fact building- gathering appropriate
information
• Putting policy in writing
• Communicating the policy
• Evaluation of existing policy

16. Procedure
• It is a written document to support a "Policy Directive".
• It is designed to describe Who, What, Where, When, and
Why by means of establishing corporate accountability in
support of the implementation of a "policy".
• The "How" = “Detailed Work Instructions“ e.g. a
company established a policy that all overtime shall be
approved. A procedure can be created to establish
“Who” can approve overtime, "What" forms/systems
need to be used, "Where" they are located, "When"
overtime is applicable. And the "Why" refers to the
management directive established via a "Policy".

17. Procedure
• The output of a procedures become input into a
work instruction which is a set of actions or
operations which have to be executed in the
same manner in order to achieve intended
results under the same circumstances.
• Policy indicates- ‘what and why’ and procedure
indicates how a policy is to be carried out.
• It mentions methods processes movement and
specific rules and regulations.

18. Programme
• Programme is the process of managing several
related projects.
• It tells what it consists of the entire broad course
of action governing employees at all levels.
• HR Programmes ( HR forecasting-Recruitment,
Selection and Placement- T&D- Evaluation, wages
and salary- employee benefits &services-
grievances handling-communication -industrial
relations

19. ELEMENTS OF HR PROGRAMMES:
1. Employment--- selection and job change
2. Training and development ,
3. Communication,
4. Grievances and discipline,
5. Wages and salary,
6. Health and safety,
7. Benefits and services,
8. Labour relations,
9. Research.
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20. SHRM
• S t r a t e g y c a n b e d e f i n e d a s
determination of the basic long term
goals and objectives of an enterprise
and the adoption of course of action
and the allocation of resources
necessary for carrying out these goals.
Besides, It combines external forces
with internal resources.

21. ROLE OF HR IN STRATEGIC
MANAGEMENT:
Environmental Strategy Strategy Strategy
scanning formulation implementation evaluation & control
External
internal
Business
Programmes
Budget
procedures
Strategic
control
Process and
performanc
e
corporate
functional
Fig: Strategic Management process
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22. STRATEGY IS CONCERNED WITH
⦿ The scope of organization activities.
⦿ Matching the organization activities to the
environment in which it operates.
⦿ Resource implication.
⦿ Operational decision.
⦿ The values and expectations of shareholders.
⦿ Long term direction.
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23. ⦿ SHRM is a planned human resource developments
and activities to achieve its goal.
⦿ SHRM focus on managing people more
systematically .
⦿ SHRM is transformational in nature i.e it helps the
people and organization to adopt learn and act
quickly.
⦿ It helps to focus on change initiatives which are
focused on high performance team, reducing
cycle time for innovation.
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24. ⦿ Implementing new technology are defined
developed and delivered in a timely way.
⦿ SHRM is proactive considers various time
frame in a flexible manner.
⦿ It permits employees to process work and
carry out job responsibility in a free flowing
way. evolved by tight control.
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25. ⦿ SHRM believes that the org. Key assets are its
employees
⦿ It realizes that organization can have
competitive edge over its rivals if it is able to
attract and retain knowledge workers
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26. Strategy
• Strategy has a number of meanings: 4Ps
• A ‘plan’- directing or guiding a course of
action.
• A ‘pattern’ – to maintain consistency in
behaviour over a period of time.
• A ‘perspective’- projecting organization’s
fundamental way of doing things.
• A ‘play’- using moves to defeat an opponent or
a competitor

27. Features Strategy
• It is a comprehensive and integrated plan for
allocation of resources.
• It is designed to improve organization's relations
to its environment.
• Strategic decisions depends on external forces.
• Concerned with attainment of organizational
goals.
• It is a standing and long term plan.
• Formulation is the primary responsibility of top
management.

28. Importance of strategy
• To cope up with the environmental future
challenges.
• Directed towards achievement of organizational
objectives.
• Helps in coordination and better control of all
department’s activities.
• It is made in the light of competitor’s policies
and strategies.
• It utilizes resources effectively and efficiently.
• It is directed towards the success of org.

29. SHRM
• Policies, programs and practices are related
to the human resource or employees
working in the organization. These
strategies are developed to defeat the
other competitors. Its specific approach
differs from organization to organization.
But the key concept is consistent i.e. to
integrate HR programs in such a way that it
helps achieve the firm’s objectives.

30. HR Manager’s Role in SHRM
• Define company’s structure, system, rewards,
processes, style, people, skills and shared values.
(defining company’s way of doing business-
inside and outside)
• Organizational audit and HR audit.
• Identify methods for renovating parts of
organization.
• Setting clear priorities and defining importance
of HR staff.

31. Strategic role of HRM
• Strategic – formulating decisions, translating
corporate strategy into HR strategy.
• Information and decision making role – new
product and best practices to serve customers
• Functional role – select, design and implement
planning and appraisal.
• Administrative role – to improve administrative
system.
• T & D – to motivate employees and achieve
objectives.

32. Barriers to SHRM
• Focusing on short term performance
• Lack of technical knowledge
• Lack of strategic perspective
• Difficulty in quantifying e.g. skills, work
development.
• Reluctant to spend money and time to train
people.
• Employee’s resistance to change.

33. Strategies at different levels
• Corporate level strategy
• Business unit level strategy
• Functional level strategy(finance, R&D,
manufacturing, marketing, personnel, etc)

34. Benefits & requirement of strategic HRM/
HR Policy
• Improvement of employee’s productivity.
• Recruitment of qualified HR.
• Adjusting with rapid technological changes.
• Reducing labor turn over.
• Control over recruitment and training programs
• Facilitating expansion programs
• To treat manpower like real assets

35. Process of strategic HR policy
• Define vision and mission
• Environment analysis
• Setting goals and objectives
• Analyzing organizational capabilities
• Policy formulation
• Policy implementation
• Review of existing policy

36. Limitations in strategic HR Planning
• Inaccuracy
• Uncertainties
• Lack of support
• Quantitative aspect
• Employee’s resistance
• Inefficient information system
• Expensive and time taking

37. Factors affecting Strategic HR planning
• Improper linkage between HR planning and
corporate level strategy.
• Rigidity in attitudes.
• Environmental uncertainties.
• Conflict between long- term and short- term
planning.
• Inappropriate HRIS

38. Guidelines for making Strategic HR planning
• Fit with the objectives.
• Top management support.
• Exercise with in budgeted provisions.
• Appropriate time horizon.
• Manpower inventory- quantity and quality should
be assessed.
• Proper HRIS
• SHRP should be properly organized and
coordinated.

39. Strategic control
Checking and verifying actual
performance against established
strategic standards to ensure
adequate progress and satisfactory
results.

40. Types of strategic control
• Established strategic plans and programs
• Personal observation
• Reports
• Control through exception principles
• MBO
• MIS
• HR Audit
• Performance appraisal
• Others- CPM, PERT, Budget

41. Strategic control process
• Determining goals
• Measuring performance
• Comparing actual with the expected performance
• Taking corrective actions

42. Operational control system
• It is a control mechanism used to set priorities
and control activities or operations of strategic
significance.
1.Picking strategic control points- income,
expenses, inventory, quality of the product,
absenteeism.
2.Mechanized measuring devices- technical and
electronic instruments used for measuring
machine operations, product quality and
production process. Contd…

43. Operational Control System
3. Ratio analyses – it describes the relationship of
one business variable to another. E.g. net profits
to net sales, net sales to working capital, etc.
4. Comparative statistical analysis – of two
companies in similar operations( helpful to keep
company on track)
5. Personal observations – formal(planned) and
informal(day to day observation)

44. Functional and Grand Strategies
• In SHRM different approaches were developed
for anticipation of environmental threats and
opportunities. The developed alternatives are
called grand strategies which may be divided into
four categories:
1.Stability Strategy
2.Growth Strategy
3.Retrenchment Strategy
4.Combination Strategy

45. FUNCTIONAL STRATEGY -
⦿ organizational plans prepared for various
functional areas of a company's organizational
structure.
⦿ (e.g., marketing strategy, financial strategy,
production strategy etc.)
⦿ Functional strategies can be part of overall
corporate strategy or serve as separate plans
of strategy .
⦿ Implementation within a functional area.
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46. SOME COMMON FUNCTIONAL STRATEGIES ARE:
⦿ Production strategy ("make or buy") - defines
what the company produces itself, and that
purchases from suppliers or partners.
⦿ Financial Strategy- to select the main source
of funding: the development of their own
funds (depriciatiation, profit, the issue of
shares, etc.) or through debt financing(bank
loans, bonds, commodity suppliers' credits,
etc.).
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47. ⦿ Organizational strategy- decision on the
organization of the staff (choose the type
of organizational structure, compensation
system, etc.).
⦿ others, such as: research and development (R
& D) strategy, investment strategy, etc.
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48. ⦿ In addition, each of the functional strategies
can be divided into three components:
⦿ strategy of building organizations - to select
the type of structure (divisional, functional,
project, etc.);
⦿ strategy to work with the staff - a way of
training (mainly administrative staff),
training of staff (in a business or educational
institutions), career planning etc.
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49. ⦿ strategy of remuneration (wages, rewards and
penalties) - in particular, the approach to the
compensation of senior managers (salary,
bonuses, profit sharing, etc.).
⦿ Responsible for implementation of the strategy at
the functional level are senior specialists (Ch.
Engineer, Director of Finance).
⦿ At the enterprise level - CEO, general director or
director of the department, at the level of groups
of companies - a collegiate body (board of
directors).
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50. GRAND STRATEGIES
⦿ Definition: The Grand Strategies are the
corporate level strategies designed to identify
the firm’s choice with respect to the
direction it follows to accomplish its set
objectives.
⦿ Simply, it involves the decision of choosing
the long term plans from the set of available
alternatives.
⦿ The Grand Strategies are also called
as Master Strategies or Corporate Strategies.
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51. ⦿ There are four grand strategic alternatives
that can be followed by the organization to
realize its long-term objectives:
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52. ⦿ Grand strategies are a means to get to your
ends – growth, profitability, etc.
⦿ The more time that you spend researching
and learning about your environment, your
market and your business, the more clearly
these come into focus for you.
⦿ While there is always some uncertainty and
some risk with any business decision, a
strategic decision with the proper homework
done is a pretty clear cut one.
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53. ⦿ The grand strategies are concerned with the
decisions about the allocation and transfer of
resources from one business to the other and
managing the business portfolio efficiently,
⦿ so that the overall objective of the
organization is achieved. In doing so,
⦿ a set of alternatives are available to the firm
and to decide which one to choose, the grand
strategies help to find an answer to it.
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54. ⦿ Business can be defined along three dimensions:
customer groups, customer functions and
technology alternatives.
⦿ Customer group comprises of a particular
category of people to whom goods and services
are offered,
⦿ and the customer functions mean the particular
service that is being offered.
⦿ And the technology alternatives covers any
technological changes made in the operations of
the business to improve its efficiency.
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55. ACCORDING TO GLUECK THERE ARE BASICALLY
FOUR GRAND STRATEGIES ALTERNATIVES:
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56. 1. Stability/ Static Strategy
• It implies that company will continue same
business with the same objectives. It also
focuses on improvement on functional
performance and maintaining the past level of
achievements.
• Features of Stability Strategy are:
1. no change in product, market and functions.
2. it maintains competitive advantage with the
present resources. 3. Past is sustained

57. 2. Growth Strategy
• When a firm increases the level of
objectives higher than what it has achieved.
• Emphasis is to increase functional
performance.
• Increasing marketing share(volume of
business).
• It includes internal growth and
diversification.

58. ⦿ Growth strategies can be divided into three
broad categories:
⦿ Intensive strategies
⦿ Integration strategies
⦿ Diversification strategies
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59. ⦿ A. Intensive strategies
⦿ Without moving outside the organization’s
current range of product and services it may
be possible to attract customers by intensive
advertising, and by realigning the product and
the market options available to the
organization.
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60. ⦿ There are three important intensive
strategies:
⦿ Market penetration-seeks to increase market
share for existing products in the existing
markets through greater marketing efforts.
⦿ Market development-seeks to increase market
share by selling the present products in the
new market.
⦿ Product development-seeks to increase
market share by developing new or improved
products for present markets.
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61. ⦿ B. Integration
⦿ Integration basically means combining
activities relating to the present activity of a
firm.
⦿ A company performs a number of activities to
transform an input to output.
⦿ These activities include right from the
procurement of raw materials to the
production of finished goods and their
marketing and distribution to the ultimate
customers.
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62. ⦿ Two types of integration:
⦿ Vertical integration- it involves gaining
ownership or increased control over suppliers
or distributors. Vertical integration is of two
types:
⦿ Backward integration-involves gaining
ownership of firm’s suppliers for example, a
manufacturer of finished goods may take over
the business of a supplier who manufactures
raw materials, component parts and other
inputs.
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63. ⦿ Forward integration-it involves gaining
ownership or increased control over
distributors or retailers.
⦿ Horizontal integration- this is a strategy
seeking ownership or increase control over a
firm competitor’s.
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64. 3. Retrenchment Strategy
• Reduction of any existing product or service
line.
• It is a short-run business policy to survive in
the face of economic recession.
• Reasons for adopting this strategy- poor
performance, threat to survival, to secure
better management and efficiency.

65. ⦿ A company may pursue retrenchment strategies when
it has a weak competitive position in some or all of
the products lines resulting in a poor performance.
⦿ In an attempt to eliminate the weaknesses that are
dragging the company down, management may follow
one or more of the following retrenchment strategies:
⦿ Turn around- a firm is said to be sick when it faces a
severe cash crunch or a consistent downtrend in its
operating profits. Such a firm becomes insolvent
unless appropriate internal or external actions are
taken to change financial picture of the firm.
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66. ⦿ Bankruptcy- this is a form of defensive strategy. It
allows organization to file a petition in the court for
legal protection to the firm in case the firm is not in a
position to pay its debt.
⦿ Liquidation- it occurs when an entire company
dissolves and its assets are sold. It is a strategy of last
resort when there are no buyers for a business which
want to be sold, the company may be wound up and
its assets may be sold to satisfy debt obligations.
⦿ Divesture- selling a division or part of an organization
is called divesture.
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67. 4. Mixed/Combination Strategy
• Using elements of 2 or more strategies at the
same time.
• It is most frequently used in multiproduct
companies.
• Reason for adoption is that a single strategy
does not fit for all products.

68. ⦿ A company pursues a combination of two or more
corporate strategies simultaneously.
⦿ But a combination strategy can be exceptionally
risky if carried out too far.
⦿ No organization can afford to pursue all
strategies that might benefit the firm. Difficult
decision must be made. Priorities must be
established.
⦿ Organization like individuals have limited
resources, so organizations must choose among
alternative strategies.
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69. Examples of combination strategy are:
⦿ Texas-based textile producer Cotton
Incorporated uses a push/pull promotional
strategy.
⦿ They push to create customer demand
through constantly developing new products
and offering these products in stores;
⦿ and pull customers towards these products
through advertising and promotion deals.
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